Corporacion America Airports(CAAP) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues excluding IFRIC12 decreased approximately 4% year-over-year, primarily due to lower passenger volumes, while revenue per passenger remained steady at $19 [6][20] - Adjusted EBITDA for the quarter declined in the mid-teens year-over-year, largely due to ongoing macroeconomic challenges in Argentina [7][23] - Total costs and expenses excluding IFRIC12 increased by 5% year-over-year, reflecting inflationary pressures in Argentina [22] Business Line Data and Key Metrics Changes - Aeronautical revenues decreased by 1.5% year-over-year, with a notable 22% increase in Uruguay, while commercial revenues fell by 6.6% year-over-year due to lower cargo and duty-free revenues in Argentina [21][22] - Duty-free sales were lower this quarter, impacted by last year's favorable FX rates, but operations in Norway, Brazil, and Italy showed positive contributions [8] Market Data and Key Metrics Changes - Total passenger traffic declined by 4% year-over-year, with domestic traffic in Argentina down 11%, while international traffic in Argentina increased nearly 10% [11][15] - Passenger traffic in Italy grew by 6%, and Uruguay saw a 15% increase, indicating strong recovery in these markets [12][15] - Cargo volumes increased by 4.4% year-over-year, although cargo revenues declined by 12% due to lower revenues in Argentina [17] Company Strategy and Development Direction - The company remains focused on disciplined capital deployment to support long-term growth, with ongoing construction projects and new service initiatives in various regions [10][30] - Recent approval of a 124% increase in domestic passenger tariffs in Argentina is expected to support local operations [9] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of the business despite challenges in Argentina, with optimism for improved conditions as inflation recedes [31] - Strong international passenger numbers in October bolster a positive outlook for the remainder of the year [31] Other Important Information - The company closed the quarter with a total liquidity position of$ 605 million, up 32% compared to year-end 2023, and a net leverage ratio of 0.9 times [24][25] - An $80 million dividend distribution was approved by the Argentine subsidiary, AA2000, with$ 68 million allocated to CAAP subsidiaries [24] Q&A Session Summary Question: Impact of Aerolineas Argentinas' potential closure - Management indicated that Aerolineas Argentinas accounts for about 6% of CAAP revenues, and while the situation is complex, historical resilience suggests the business could recover even if Aerolineas were to cease operations [36] Question: Florence Airport CapEx and construction timing - Approval for the Florence Airport project is expected by year-end, with construction anticipated to take 2-3 years, including a new runway and terminals [37] Question: Update on tariff negotiations in Argentina - Management confirmed that the domestic tariff has been adjusted to about $5.5, with no further adjustments expected for the next year [43] Question: Traffic trends for 2025 - Positive dynamics are expected in Uruguay, Brazil, and Italy, while international traffic in Argentina is anticipated to continue performing well despite domestic challenges [42] Question: Opportunities to extend concession assets - Management is working on a CapEx proposal in Armenia to adjust airport capacity, with negotiations ongoing with the government regarding contract duration [48]